High Court Of Madras
N.K.S. Rengeswaran vs. Commissioner Of Agricultural Income Tax & Ors.
Ta. Srinivasa Raghavan, for the Petitioner : G. Balraj, for the Respondent
MRS. T. MEENA KUMARI, J. :
This writ petition is filed by the petitioner seeking a writ of certioriari calling for the records of the first respondent in R.P. Nos. 287 to 292 of 1987 and quashing the order passed therein on 5th Aug., 1989.
2. The case of the petitioner is that he is an agriculturist. He purchased 47.23 acres of land comprised in S. No. 226 in Megamalai Village, Periyakulam Taluk, in the year 1981. His wife also purchased 51.76 acres of land in S. No. 351, village in the year 1981. It is stated that the second respondent passed the revised orders under s. 65A(3) of the Tamil Nadu Agrl. IT Act, 1955 (hereinafter referred to as “the Act”), by his proceedings GIR No. 31/R/UPM/1981-82, dt. 14th Sept., 1987, for the asst. yrs. of 1981-82 to 1986-87 bringing the above 98.99 acres as “escapement”. It is further stated that the second respondent has classified the abovesaid lands as “tope other than coconut”, relying on the inspection report of the Asstt. CIT of Agrl. IT, Madurai. It is stated further that the land is unirrigated dry land and hence the petitioner is not liable to pay the agricultural income-tax. He further contended that as there is no agricultural operation in the lands, there is no question of payment of any agricultural income- tax. The basic operations are the effective cause of the products being raised from the lands and the subsequent operations divorced from the basic operations cannot constitute by themselves agricultural operations. According to learned counsel for the petitioner, basic operations include tilling of the land, sowing of the seeds, planting and similar operations on the land and the basic operations require the expenditure of human skill and labour upon the land itself and there are subsequent operations, namely, weeding, digging the soil around the growth, removal of undesirable undergrowth and all operations which foster the growth and preservation of the same from insects and pests but also from depredation from outside. It also includes the human labour and skill spent in the performance of the subsequent operations like tending, pruning, cutting, harvesting and rendering the produce fit for the market.
3. The Agrl. ITO, Madurai-the second respondent hearin seems to have treated the land as “tope” coming within the definition of s. 2(y) of the Act and as such he levied the additional tax. On receipt of the notice on 16th July, 1987, the petitioner sent a reply telegram whereby he prayed for time for filing objections. Without giving time for filing objections, the respondent passed the revised orders. Questioning the same, the petitioner has filed R.P. Nos. 287 to 292 of 1987, before the first respondent. The petitioner has further stated that the first respondent without going into the provisions of law and without applying his mind, has passed orders on 5th Aug., 1989, dismissing the revision petition. Learned counsel for the petitioner has contended that the revised order of assessment as confirmed by the first respondent is illegal and without jurisdiction. He further contended that there is no income from the land or trees. The petitionerâs counsel further contended that in the enquiry report since it has come out that it is only “tope”, the authorities should have excluded the lands from the levying of the agricultural income-tax as there are no basic operations and also subsequent operations. Hence, he argued that in the absence of basic operations and subsequent operations, the authorities should have come to the conclusion that “tope” is not liable to be taxed. The case of the petitioner is that he has not derived any income from the trees and hence he is not liable for the assessment. He has relied upon the judgment of this Court reported in R.V.R. Nallasivam vs. Commr. of Agrl. IT (1982) 133 ITR 184 (Mad), wherein this Court has held that as there are no agricultural operations on the land, there is no question of agricultural income and, consequently, there is no liability of income-tax under the Act.
4. When coming to the provisions of the Tamil Nadu Agrl. IT Act “agricultural income” is defined under s. 2(a). According to s. 2(a), “agricultural income” means any rent or revenue derived from land; any income derived from such land in the State by (i) agricultural, or (ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the procedure raised or received by him fit to be taken to market, or (iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in sub-cl. (ii). Sec. 2(nnn) defines “land” : “âlandâ means agricultural land which is used for the purpose of growing any plantation crop with or without any other crop intemingled with such plantation crop or for purposes subservient thereto and is either assessed to land revenue in the State or is subject to a local rate assessed and collected by officers of the Government as such and includes any plantation in any forest land.” Sec. 2(r) defines “plantation”: “âplantation means any land used for growing all or any of the plantation crops with or without any other crop intermingled with such plantation crops.” Sec. 2(rr) defines “plantation crops” to mean: “arecanut, tea, coffee, rubber, clove, cardamom or pepper”. Learned counsel appearing for the petitioner has argued that even assuming that the “tope” as defined under s. 2(y), any land containing large groups of fruit trees or valuable timber trees, whether growing spontaneously or grown artificially and includes orchards, looking into the definition of plantation crop, tope does not include arecanut, tea, coffee, rubber, clove or cardamom, as tope is only a land containing such groups of fruit trees or valuable timber trees which are growing spontaneously or artificially and includes orchards. He has argued that the first respondent has come to the conclusion stating that the trees standing in his lands ought to have been fetching income but the order of the first respondent is not supported by any records and the first respondent has not applied his mind for proper presentation. He has levied income-tax only based on the report of the Asstt. Commr., who has classified the lands as “tope” which is also baseless.
In this respect learned counsel has relied upon a Division Bench decision of this Court in R.V.R. Nallasivam vs. Commr. of Agrl. IT (1982) 133 ITR 184 (Mad) to show that when there are no agricultural operations on the land, there is no question of agricultural income and, consequently, there is no liability to pay the income-tax which could be compounded under the Act. In the above decision, the Division Bench of this Court has relied upon a judgment of the Supreme Court in CIT vs. Raja Benoy Kumar Sahas Roy (1957) 32 ITR 466 (SC) wherein it was pointed out (p. 190 of 133 ITR) : “âAgricultural in its primary sense denotes the cultivation of the field and is restricted to cultivation of the land in the strict sense of the term, meaning thereby tilling of the land, sowing of the seeds, planting and similar operations on the land. These are basic operations and require the expenditure of human skill and labour upon the land itself.” Their Lordships refer to the basic operation mentioned above, and also the subsequent operations like weeding, digging the soil around the growth, removal of undesirable undergrowth and all operations which foster the growth and preservation of the same from insects and pests. The human labour and skill spent in the performance of these subsequent operations like tending, pruning, cutting, harvesting and rendering the produce fit for the market, though they would be agricultural operations when taken in conjunction with the basis operations, could not be said to have been spent on the land itself and the mere performance of subsequent operations would not be sufficient to characterise them as agricultural operations. In order to invest them with the character of agricultural operations these subsequent operations must necessarily be in conjunction with and in continuation of the basic operations which are the effective cause of the products being raised from the land and the subsequent operations divorced from the basic operations cannot constitute by themselves agricultural operations. Only if this integrated activity, which constitutes agriculture, is undertaken and performed in regard to any land, could that land be said to have been used for âagricultural purposesâ and the income derived there from be said to be âagricultural incomeâ derived from the land by agriculture, under s. 2(1). Considered in the light of the definition, as interpreted by the Supreme Court, it would follow that in the present case there are absolutely no basic operations and, therefore, any income derived from the land in question would not be agricultural income.” It was also further held that part of the definition which includes the agricultural lands, forest lands cannot be taken for compounding any land from which agricultural income was not derived. When there is no agricultural income the Bench held that there is no liability for tax which could be compounded under s. 65.
In this case also it is evident that there is no evidence to show that there are basic operations requiring the expenditure of human skill and labour upon the land itself and also subsequent operations like weeding, digging the soil around the growth, removal of undesirable undergrowth and all operations which foster the growth and preservation of the same not only from insects and pests but also from depredation from outside, tending, pruning, cutting, harvesting and rendering the produce fit for the market. It there are any basic operations and subsequent operations, then it can be construed that the agricultural operations have been performed with regard to any land. It can also be said that they have been used for “agricultural purpose” and the income derived from there is said to be agricultural income which is assessable to tax. But in the present case, there seems to be absolutely no basic operations or any income derived from the land. It will not be agricultural land. On the other hand, learned Government advocate has contended that the petitioner has not filed his objections and reply to the notice issued to him and the petitioner is now estopped from contending that there is no agricultural operation in his lands and he is not liable to pay the agricultural income tax. So far as the classification of the land as “tope” is concerned, the Government advocate has argued that the authorities have rightly applied their mind and come to the conclusion that the land is “tope” and liable for agricultural income-tax. Heard both sides. In this case it can be seen that there were no basic operations on the land and also subsequent operations. As stated supra, it could be seen that in this case there are no basic operations or subsequent operations like tending, pruning, cutting, harvesting and rendering the produce fit for the market and there was no evidence available before the authorities to show that there was an income from the land liable for agricultural income-tax except the report of the Asstt. Commr. of Agrl. IT, Madurai. Thus, in the absence of any evidence to show that the lands were actually cultivated, the income could not have been treated as agricultural income. The reference to the lands being classified as “tope” in the revenue records and the direction by the Commr. of Agrl. IT on the said basis, has also no material to support it, except the classification of the lands as “tope”. It was held by the Supreme Court in CWT vs. Officer-in-Charge (Court of Wards) (1976) 105 ITR 133 (SC) that the classification in the revenue records is not conclusive and there was absolutely on evidence of any dry crops having been raised in these lands and in the absence of any such crop having been raised, the classification in the Revenue register would also have no evidentiary value.
In view of the above fact, it will be followed in this case that when there were no agricultural operations on the lands, there was no a question of any agricultural income and, consequently, there would be no liability to agricultural income tax which could be compounded under the Act. In view of the above findings the orders issued by the second respondent in proceedings G.I.R. No. 31/R/UPM/1981-82, dt. 14th Sept., 1987, culminating in the passing of revisional orders by the first respondent in R.P. Nos. 287 to 292 of 1987, dt. 15th Aug., 1989, are quashed. In the above circumstances, the writ petition is allowed. No costs. Further, the authorities are not prevented from assessing the lands under the Agrl. IT Act if they are satisfied that there are agricultural income from the lands. In view of the disposal of the main writ petition, WMP. No. 20510 of 1989 is closed.
[Citation :242 ITR 344]